Year End Tax Planning: The Meeting That Pays for Itself

Most tax surprises are decided months before anyone files a return.

By the time a business owner sits down with a tax preparer in March, the year is closed. Revenue is booked. Expenses are spent. The salary was paid or it wasn't. At that point, the tax return is a record of decisions that already happened, and very little can change.

That's why the most valuable tax conversation of the year doesn't happen in March. It happens in October.

Why October, Not March

October 15 is the extension deadline for last year's individual returns. For a lot of owners, that week is the last time they think about taxes until the following spring.

It should be the first.

By mid October, there are roughly eleven weeks left in 2026. That's enough time to see where the year is heading and still act on it. You have nine months of real numbers. You can project the final quarter with reasonable confidence. And nearly every decision that affects this year's tax bill is still open.

Wait until March and you're reading the result. Plan in October and you're still shaping it.

What a Year End Planning Meeting Covers

A good planning session isn't a lecture on tax law. It's a working meeting built around your actual numbers. Here's what it typically covers.

1. A projection of where you'll land. Everything starts here. We take your year to date profit and loss, project the fourth quarter, and estimate your total tax liability for the year: federal income tax, self employment or payroll tax, and Tennessee franchise and excise tax for the entities that owe it.

Without a projection, every other decision is a guess. With one, you know the size of the problem (or the opportunity) before you decide anything.

2. The entity and salary check. If you're an S Corp owner, this is where we confirm your reasonable salary still fits the year you actually had. Salary has to run through payroll by December 31 to count for 2026. If profit came in well above or below what you expected, the right salary may have moved too.

If you're not an S Corp, this is the moment to ask whether that should change next year. The election isn't right for everyone, and in Tennessee the math includes the excise tax and real compliance costs. But a projection is the only reliable way to answer the question, and October leaves time to set it up properly for January if it makes sense.

3. Timing of purchases and expenses. Equipment, vehicles, and other large purchases can often be deducted in the year they're placed in service. That makes timing a real lever. Buying a needed truck in December instead of January can move the deduction by a full tax year.

The key word is needed. A deduction reduces taxable income, not your tax bill dollar for dollar. Spending a dollar to save thirty cents is not a strategy. The planning meeting is where we separate purchases that make sense on their own from purchases that only look good because of a tax myth.

For cash basis businesses, the same logic applies to ordinary expenses and to invoicing. Paying certain bills before year end, or choosing when to bill, can shift income between years. Whether you should depends on where you'll land this year compared to next.

4. Retirement contributions. Retirement plans are one of the few places where an owner can lower taxes and keep the money. Depending on the plan, contributions can be substantial.

Deadlines vary. Some plans have to be set up before December 31 to count for this year.

Others allow contributions up to the filing deadline. The planning meeting is where we figure out which option fits your cash flow and which deadlines actually apply to you, before any of them pass.

5. The estimated payment true up. Most owners pay estimates through the year based on last year's numbers or a rough guess. By October, there's enough information to check whether those payments are on track.

If you're behind, the January 15 payment is your chance to catch up and limit underpayment penalties. If you're ahead, you may be able to reduce that final payment and keep more cash in the business. Either way, you walk into tax season knowing the number instead of discovering it.

What It Looks Like in Practice

[Composite client story based on real experiences. Details changed to protect privacy.]

A home services owner came into October assuming this year looked a lot like last year. Revenue had grown, but so had payroll, so he figured things had evened out. His estimated payments were based on the prior year's return.

The projection told a different story. Margins had improved in the second half, and profit was tracking well above the prior year. Based on the estimates already paid, he was headed for a sizable balance due in April, plus penalties.

There were eleven weeks to work with. His S Corp salary was adjusted through the remaining payroll runs to match the stronger year. A replacement service van he had already planned to buy in the spring was moved into December, since the business needed it and the timing now had value. He set up a retirement plan before year end. And his January estimate was sized to cover the rest.

He still owed tax. Profitable businesses do. But April held no surprise, the cash was set aside ahead of time, and every decision was made on purpose instead of in a scramble.

His reaction afterward was simple: "I didn't know you could do this before the year was over."

Why It Pays for Itself

The value of a planning meeting shows up in three places.

Lower tax, where the law allows it. Not through tricks, but through timing, structure, and contributions you were entitled to make anyway.

Better cash flow. Knowing your liability in October means you can set money aside over three months instead of finding it all at once in April. That alone changes how the first quarter of next year feels.

Better decisions. When you know the tax impact of a purchase, a hire, or a salary change before you make it, you make it for the right reasons.

Compare that to the alternative: a return filed in March, a number you can't change, and a check you didn't plan for.

Who Should Book One

A year end planning session is worth the time if any of these apply to you:

• Your profit this year is meaningfully different from last year

• You're an S Corp owner, or wondering whether you should be

• You're considering a major equipment or vehicle purchase

• You haven't set up a retirement plan, or haven't funded one this year

• Your estimated payments were based on last year's return

• Your tax bill last April caught you off guard

  
  

If even one of those fits, the conversation is worth having now, while there's still time to act on it.

Let's Plan Before the Year Closes

At Bottomline Capital, year end tax planning is built into how we work with business owners. We start with your real numbers, project where you'll land, and walk through the decisions that are still open, so the return in the spring confirms a plan instead of delivering a surprise.

There are still weeks left to shape 2026. Let's use them.

Book a planning session: https://www.bottomlinecapitalllc.com/book-online

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